Rooivalk ditched by Denel

Jezza

Member
Arms maker to provide defence force with 264 combat vehicles

Political Correspondent

CAPE TOWN — Struggling arms maker Denel has been given an R8bn vehicle contract lifeline by Armscor. This comes hard on the heels of its failure to win a bid to supply Turkey with Rooivalk helicopters.

Denel has now decided that the Rooivalk, on whose development the government spent R8bn, is not commercially viable and it will not spend any new money on the helicopters.

Armscor and the defence department will now have to decide whether to subsidise the maintenance of Denel’s Rooivalk capability so that it can continue servicing the 12 helicopters bought by the South African Air Force over their 25-year lifespan.

The other option would be for the air force to mothball the helicopters and for the costs to be written off entirely.

Denel group CEO Shaun Liebenberg announced Denel’s decision on the Rooivalk and details of the Armscor contract — the biggest in the company’s history — ahead of Public Enterprises Minister Alec Erwin’s budget vote speech in Parliament yesterday.

He said Denel would not be able to afford to look after the air force’s Rooivalk aircraft in the future.

“There are some big strategic decisions which the air force and the shareholder must make on this product. The government could decide to subsidise it because of the defence force’s operational requirements,” said Liebenberg.

Erwin said in an interview that the departments of defence and public enterprises would have to decide later in the year what to do about the Rooivalk.

The R8bn Armscor contract, known as Project Hoefyster, would see Denel Land Systems supply the South African National Defence Force with 264 infantry combat vehicles in five variants over 10 years.

The new-generation combat vehicle would replace the Ratel and would be based on a Finnish Patria platform with a Denel- designed turret. It would be an 8x8-wheeled vehicle in the 25-ton class to transport and protect infantry troops.

“The contract signifies a tremendous boost to local industry and the economy,” Liebenberg said. “This contract puts Denel Land Systems on the road to sustainability” as well as commercial viability. South African companies would deliver more than 70% f the total value of the contract, 18% of which would be for the development of the turret systems.

Denel as main contractor would involve numerous local defence companies and subcontractors such as BAE Systems’ subsidiary Land Systems OMC in delivering the product.

The vehicle itself would be built locally under a Patria licence.

http://www.businessday.co.za/articles/topstories.aspx?ID=BD4A466341

Oh well, it unfortunately shows that it will become very much harder for the medium/smaller non aligned countries to do this sort of thing. Collaboration seems to be the only way forward when you are competing in this league.

Of course, if the South African Airforce were to order a second squadron, the above situation would change. This appears unlikely however.
 

contedicavour

New Member
It would be interesting to find out what role the South African defence industry has in the latest new contracts : the Gripen, the Agusta A109, the Meko frigates, the Type 209 SSKs, etc.
If the SADFs change all of their equipment without relying heavily on local defence industry, then the latter will have to focus on those market segments where it is strong on exports (such as artillery) and drop the rest (Rooivalk for instance).

cheers
 

RSM

New Member
It would be interesting to find out what role the South African defence industry has in the latest new contracts : the Gripen, the Agusta A109, the Meko frigates, the Type 209 SSKs, etc.
If the SADFs change all of their equipment without relying heavily on local defence industry, then the latter will have to focus on those market segments where it is strong on exports (such as artillery) and drop the rest (Rooivalk for instance).

cheers

Yip its a pity that the Rooivalk project has been dropped by Denel. The platform is absolutely fantastic. The hardware attached to it leaves it incompetitive (stranded) in the market. It's tantamount to attach bricks in the misslepods of an F16 and then try selling it...
 

neil

New Member
It would be interesting to find out what role the South African defence industry has in the latest new contracts : the Gripen, the Agusta A109, the Meko frigates, the Type 209 SSKs, etc.
If the SADFs change all of their equipment without relying heavily on local defence industry, then the latter will have to focus on those market segments where it is strong on exports (such as artillery) and drop the rest (Rooivalk for instance).

cheers
The south african defence industry has a significant workshare on the new strategic arms procurements..

significant proportions of the combat systems design on both the hawk and gripen purchases have gone to south african companies like ATE..

the south african hawks were 'gripenised' so to speak, as to act as a proper lead in to the new gripens to be operated by 2 Squadron.. as the gripens were to have south african EW systems, helmet mounted displays and the like.. so did the hawks, bar the helmet displays..

the combat suite on the new navy frigates was 85% south african designed and installed as well.. the Umkhonto SAM system was completely locally produced as well.. it has also been ordered by the swedish and finnish navies..

the same goes for the new submarines as well.. albeit on a much smaller scale.. i'm also not 100% sure.. but a part of the periscope or EW antennae was produced locally.. the Korean navy also ordered it form us..

of the new A109 helicopters.. 25 of the 30 were locally assembled.. and of the next bit I'm not 100% sure.. but Denel Aerospace also recieved a license to produce or service the A109 for international customers.. so a significant portion of the Swedish Air Force A109 order went to Denel on subcontract from Agusta Westland..

denel also manufactures nato standard pylons for international gripen customers.. and certain hawk components as well..

it is the A400m programme however that involves south african industry on the largest scale.. since South Africa joined the programme as a full partner in 2005\06, a proportion of the work relative to the order placed by the south african air force has gone to SA industry..

what sets this programme apart from the Rand 50 billion strategic arms package for the Gripens etc.. is the fact that it was concieved from the outset as a way to recapitalise the South African aviation industry in a manner similar to the way the government did with the SA automobile industry..

make no mistake.. the south african air force has a huge requirement for airlift.. since the 9 upgraded C130BZ's will have to retired around 2015..

however in my opinion the passive SA government ordered the A400M not to strengthen the Air force.. but rather to revitalise industry, although the aircraft will support their foreign policy with regard to humanitarian missions in africa etc.

you might say.. how can the SA government be passive, and at the same time spend R50 billion(about $6.8 billion in 2007 exchange rates) on arms?

well without going in to this in detail.. as it would be off topic.. :)
suffice it to say, south africa spends about 1.3% of GDP on defence.. and maintains only a token defence force.. a mere shadow of the once mighty SADF.. but thats a topic for another day..
 

Jezza

Member
  • Thread Starter Thread Starter
  • #5
thanks for the update neil and welcome to the funnyfarm:) :( :cool: :p: :rolleyes:
i think the south african defence industry is fascinating.
feel free to add to above.....:D
 
Last edited:

contedicavour

New Member
the Umkhonto SAM system was completely locally produced as well.. it has also been ordered by the swedish and finnish navies..

..
Finnish yes absolutely, though not the Swedes AFAIK.

That aside, your post is very interesting. My suggestion would though be to focus on some areas of excellence to preserve local development of weapons. Otherwise there's a risk of becoming a components manufacturer only or of limiting activity to assembly of imported kits.
Artillery is definitively an area of excellence for example. APCs and AIFVs for rough terrains is another.

cheers
 

wzhtg

New Member
re

It's such a sad issue, the Rooivalk was seriously a good helicoptor. I was actually hoping it to be one of the main contenders for Malaysia's Attack helicoptor requirement but I guess now the upper hand goes to the A129. Which is not bad too, I mean Malaysia already has some A109M like south africa and with turkey sure to be a big custormer, there could be extensive opportunities for further development of the A129.
 

neil

New Member
Finnish yes absolutely, though not the Swedes AFAIK.
Apparently the Swedes have decided to buy the Umkhonto SAM for their Visby class stealth corvettes.. possibly as an offset to the South African SAAB Gripen purchase..

I tried to post the relevant url from sea power.. but apparently I must have 15 posts before I can do so.. he he..

you are spot on when you say Denel should focus on certain areas of expertise.. I believe thats what they are doing.. they recently appointed a new CEO, Shawn Liebenberg to try and turn around the struggling arms manufacturer..

His strategy seems to be the unbundeling of the company.. selling of all non core bussiness companies and turning Denel into a sort of holding company for other smaller companies that each specialize in a certain field..

So far Denel is still a loss making company, however things are starting to improve..

The fact is in my opinion that the South African arms industry will get smaller and smaller, since it cannot rely on large orders from the National Defence Force anymore.. and on the international arena they cant compete with the russian, european and american giants..

however a lot of firsts have been achieved by south africa, like the first[and probably the last :)] complete design of an attack helicopter on the African continent..

In responce to a parliamentary question by opposition members of parliament to the minister of defence Mosia Lekota recently, he stated that the South African Air Force is spending R292 million (about $42 million at 2007 exchange rates) on the operationilisation of the Mokopa advanced anti tank missile for the Rooivalk helicopter.. and that they hoped the missile would be declared operational by middle 2009..

he also stated that the air force was heading toward declaring initial operating capability for Rooivalk equipped 16 Squadron during May or June 2008.. albeit with cannon and rockets only..

Although one should not read to much into this, it seems to me that at the moment the South African government is leaning towards retaining the Rooivalk in service and financing the rest of the almost completed programme itself.. leaving Denel to recover financially..

I dont think the minister would have made these statements in parliament if the government wasn't concidering keeping Rooivalk going.. (espesially since it is the cornerstone of the governments future peacekeeping capability on the African continent..)

time will tell..
 
Top